The Council of the European Union and the Parliament have come to a provisional agreement on amendments to the Solvency II directive, which they say will boost the role of the re/insurance sector and make it a more resilient and prepared industry for the benefit of policyholders.
In the re/insurance industry, the recent agreement between the EU Council and Parliament amendments is of significant importance.
This agreement, along with the establishment of the Insurance Recovery and Resolution Directive (IRRD), is designed to enhance the industry’s resilience and preparedness.
The revised Solvency II rules aim to amplify the sector’s role in providing long-term investments and improving policyholder protection.
Additionally, the IRRD focuses on ensuring readiness for significant financial distress among re/insurers, with an emphasis on orderly resolution in insolvency situations.
The rules will make the re/insurance space more resilient and better prepared for future challenges, all with a view to better protecting policyholders.
These developments, awaiting finalization and formal adoption, represent a major regulatory evolution for the European re/insurance sector, with a focus on financial stability, consumer protection, and support for economic recovery.
With this dual role, the sector will contribute to the achievement of the Capital Markets Union, to the financing of the green and digital transitions and Europe’s economic recovery form the COVID-19 pandemic.
The goal of the IRRD is to make sure that re/insurers and relevant authorities are better prepared in cases of significant financial distress.
The new rules focus on channelling funds for businesses, greater resilience and stability, consumer protection, and new tasks for the European Insurance and Occupational Pensions Authority (EIOPA).
The IRRD rules focus on an orderly resolution in case of insolvency and the introduction of a new regime at European level for resolving insurers in an orderly manner.
Next, the provisional agreements will be finalised and presented to member states’ representatives and the European Parliament for approval. The Council and the Parliament will have to formally adopt the texts if approved.